Is capitalism in crisis? Of course.
Masses of youngsters and students are
rebelling against it, often for good cause, considering the abuses committed in
But blaming capitalism for the recent crisis is like blaming
cars for road accidents.
Those responsible for crises or accidents are
people, not capitalism or cars. The recent crisis on Wall Street was due to the
rapacious rascals who abused our trust, not to the capitalist
Capitalism is the best system we have for producing goods and
services, but it is not a moral system. Its moral value is in the freedom from
want it gives us, the time and the means to exercise choice, for better or for
Freedom encourages creativity, in economics as in the sciences or
the arts. But freedom can be abused.
Without a moral compass, freedom can
degenerate into license and chaos, as it did recently on Wall
Many consider the Wall Street crisis to be the ultimate proof of
the failure of capitalism. However, the crisis did was not the result of “market
failures,” but rather of market distortion by government.
This was the
result of two massive government interventions. The first occurred after the
dot.com crash, when the Federal Reserve flooded the US economy with cheap
credit. The second happened when the Clinton appointees who headed the
semi-governmental mortgage lenders Fanny May and Freddie Mac created trillions
of dollars of worthless mortgages to enable Americans to “own” homes, despite
the fact that they lacked the means to pay for them.
mortgages were used as a basis for the speculation in derivatives that
eventually toppled Wall Street’s investment banks and the banking industry
GREED CERTAINLY played a part in the speculative frenzy, but
bankers were also forced to pursue unethical practices to stay ahead in a
That few resisted the temptation is indeed a moral blot
on Wall Street.
But we must also remember that without government
intervention the denizens of Wall Street would have not have faced the
temptations that led to their transgressions.
As is the case in Israel
today, it was the subjection of markets to political manipulation that corrupted
both the US economy and politics.
But the haters of capitalism,
especially intellectuals, who have been historically envious of money-making
“illiterates,” are not impressed by facts.
Aversion toward the rich has
had strong roots in Zionism since its early leaders embraced Marxist practices
that almost bankrupted the Zionist enterprise. Marxists consider any profit
making as exploitative because, according to Marx (and his discredited “labor
theory of value”) profit derives only from exploiting someone’s labor. Therefore
they consider capitalism the root of all evil and want it destroyed.
care not that capitalism delivered the world from grinding poverty.
dismiss as meaningless the spectacular achievements of capitalism in every
parameter of human life, from longevity and health to enhancing the status of
women and children to increasing knowledge and better education.
ignore the fact that marketoriented regimes have enabled the lower-income
strata, especially the poorest (as in India and China today) an incomparably
better standard of living in absolute terms than socialist states, even if in
relative terms large gaps still remain within capitalist economies.
of those defined as poor in America own their own cars and homes, which are
stocked with many electrical appliances. It was not so long ago that those
things were the exclusive privilege of the very rich.
are obsessed with envy and therefore demand absolute equality of results. It is
a unattainable goal since humans are born with such different attributes that
only brutal coercion can make them “equal.” The call for “social justice” is
therefore often a mask for hatred of the rich.
In Israel the hatred for
the rich is justified by the fact that our oligarchs make huge profits through
monopolistic practices that plunder the public.
Worse, by creating a
non-competitive economy these monopolies reduce efficiency and
They lower workers wages and lessen the prospects of
university graduates landing a well-paying job.
There is also justified
anxiety among the young that the revolutionary dislocations created by the
information age may leave them jobless.
There are millions of embittered
university graduates in the world who invested huge sums of money in worthless
degrees in the social “sciences” and such.
Radical leftist professors,
protected by spineless university boards, stuffed their students’ minds with
moldy 18th-century notions like class warfare, and with debilitating “post
modernist” nihilism, instead of giving them the broad knowledge and the useful
skills necessary for coping with a changing world. No wonder they are so
desperate and angry.
Their anger and confusion are exploited by such
groups as the American “Occupy Wall Street” movement, and the “National Left” in
other countries (soon in Israel too?).
The abuses by so-called
“capitalists” make it easy to channel their rage against capitalism. There are
also huge sums of money available to underwrite these “spontaneous”
demonstrations (one wonders from what sources). There are networks of anarchists
and radical leftists helping organize “protests” even in despised
What is happening in Greece can teach us that anti-capitalist
rage, coupled to a bankrupt welfare state can easily turn such “social protests”
Compared to the disaster such violent protests and strikes can
wreak, even the most serious problems plaguing capitalism may seem like child’s
play.The writer is director of the Israel Center for Social and Economic
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